The United States Internal Revenue Service (IRS) has put out a call for developers, contractors and others interested in designing solutions that can break the privacy level of the popular cryptocurrency Monero (XMR).
Monero (XMR) is a recognized cryptocurrency which has become very popular due to the level of privacy and anonymity it guarantees. This cryptocurrency, developed in 2014, has become the main choice for those looking to keep their transactions and financial operations away from public scrutiny, although due to the qualities it offers, it has earned several critics and detractors.
For some months now, the United States Internal Revenue Service (IRS) The IRS announced its intentions to track financial transactions carried out with cryptocurrencies, especially Monero, in order to prevent the incidence of financial crimes. The government agency is convinced that cryptocurrencies, and especially Monero (XMR), are used for this type of crime. For this reason, at the beginning of September, the IRS opened a request where it calls on all developers, contractors and other interested parties to design and create a solution that allows the tracking of operations and transactions carried out with the privacy cryptocurrency. In the application issued by the IRS reads as follows:
“IRS-CI is seeking a solution with one or more contractors to provide innovative solutions for privacy coin tracing and attribution, such as expert tools, data, source code, algorithms, and software development services.”
The IRS will award a $625 reward to anyone who successfully develops this tracking tool. The reward will depend on the effectiveness of the tool and whether the U.S. government approves its use.
It may interest you: CipherTrace develops tools with the ability to track Monero transactions
Working prototype
According to IRS guidelines, those interested in participating in this application must send the agency a sample of how they intend to break the privacy level of Monero (XMR). Among the samples or proofs of work that can be sent, a working prototype of a digital system that shows the identification of a user in Monero, the amount or amount involved in the transaction and the date and time in which a transfer of funds was made stands out.
This data, which in blockchains such as Bitcoin (BTC) y Ethereum (ETH), are in the public domain, in Monero they remain hidden among an endless number of transactions that are used to not reveal them so easily. Thanks to several security techniques, Monero (XMR) has managed to emerge unscathed from the continued insistence of the IRS and other entities to track its transactions. For example, the United States Department of Homeland Security recently partnered with the analytics firm ciphertra by to develop a set of tracking tools for Monero, and although they claimed that in the first phase these tools had fulfilled their objective, both the Monero developers and the crypto community that supports it denied this possibility, at least for the moment.
625 thousand dollars as a reward
Those developers who manage to design an efficient and effective system for tracking transactions in Monero will receive a total of $625, which will be divided into two parts. A total of $500 will be given to the developers of the system during the first 8 months, and if the US government successfully implements the system within 120 days of its creation, the developers will receive an additional $125.
In order for the tracking system to be approved, it must be able to identify and trace Monero transactions made this year back to users. In addition, the tracking tool must be able to predict future transactions with the cryptocurrency. Although this is not an easy task, the IRS hopes to achieve its goal in the short term. The IRS's application closes on September 16 at 08:00 a.m. EDT.
Other IRS actions related to cryptocurrencies
At the end of August, the Internal Revenue Service (IRS) requested the payment of taxes from all those who own and hold cryptocurrencies and digital assets. Through a new wave of letters, the IRS is trying to incentivize crypto asset users to pay their obligations as taxpayers in the US territory. Among the series of letters, the IRS informs users about why they must comply with their obligations as taxpayers, and threatens to examine users' accounts if they refuse to comply with the payment of the established taxes.
On the other hand, the IRS recently announced the signing of a new contract with the analysis company Blockchain Analytics and Tax Software, for an amount totaling $249.900 USD. According to the announcement, Blockchain Analytics and Tax Software will work together with the IRS to optimize the entity's cryptocurrency tracking tools in order to continue the fight against terrorist networks and cybercriminals that use cryptocurrencies and digital assets to hide their crimes and carry out illegal activities.
Continue reading: Battle between CipherTrace and Monero: Triptych protects users against tracking tools
